Illinois Pension Benefits Have Grown Faster Than Revenues and Incomes

Illinois Pension Benefits Have Grown Faster Than Revenues and Incomes2018-02-082018-02-08https://toniakhouri.com/new-2017/wp-content/uploads/2017/09/tonia-khouri-for-state-representative-logo-2.pngTonia Khouri for State Representativehttps://toniakhouri.com/new-2017/wp-content/uploads/2018/02/illinois-pension-growth.png200px200px

A recent analysis by Wirepoints reveals that too little money into pensions hasn’t been the issue. Instead, it’s the dramatic growth in pension benefits promised by politicians that have been bankrupting Illinois.

Promised pension benefits in 2016 were 1,000 percent higher than they were three decades ago.

Total pension benefits have grown at an annually compounded rate of 8.8 percent over the past three decades. Compared to 1987, benefits have grown 1,061 percent.

By any measure, the pension promises made by Illinois politicians have been extreme and unsustainable.

Those benefits are overwhelming the state’s economy and taxpayers’ ability to pay for them.

Illinois state pensions: Overpromised, not underfunded

There’s little argument that Illinois politicians are to blame for the state’s massive pension crisis.

However, how politicians caused the crisis has long been misunderstood. Critics on both sides of the aisle typically accuse politicians – and by extension, taxpayers – of shortchanging pensions.

But a Wirepoints analysis reveals that too little money into pensions hasn’t been the issue. Instead, it’s the dramatic growth in pension benefits promised by politicians that’s been bankrupting Illinois.

Wirepoints analyzed Illinois pension and economic data stretching back to 1987 and also compared pension plans across the country from 2003-2015, using data from the Illinois Department of Insurance and Pew Charitable Trusts.

Wirepoints found that pension benefits have grown exponentially over the past 30 years.

Promised pension benefits in 2016 were 1,000 percent higher than they were three decades ago. As the below graphic shows, no other measure of Illinois’ economy comes even remotely close to matching the growth in promised benefits.

Those benefits are overwhelming the state’s economy and taxpayers’ ability to pay for them.

Total pension benefits have grown at an annually compounded rate of 8.8 percent over the past three decades. Compared to 1987, benefits have grown 1,061 percent.

That growth is six times more than total state general revenue growth (236 percent) over the same time period; eight times more than median household income growth (127 percent); and nearly ten times more than inflation (111 percent).

In fact, Illinois’ pension benefits grew faster than in every other state in the nation except New Jersey and New Hampshire between 2003 and 2015, according to Wirepoints’ analysis of Pew data.

By any measure, the pension promises made by Illinois politicians have been extreme and unsustainable.

Wirepoints’ findings also dispel the claim that too little money in the pension plans caused the current crisis – state pension assets, buoyed by taxpayer contributions, have also grown exponentially since 1987.

Pension assets are seven times higher in 2016 than they were 30 years ago. They’ve grown five times more than household incomes over the entire period and nearly six times more than inflation.

And in the 2003-2015 period, Illinois assets grew the seventh-fastest of any state in the nation.

A copy of our report filed with the State Board of Elections is (or will be) available on the Board’s official website https://www.elections.il.gov/ or for purchase from the State Board of Elections, Springfield, Illinois.

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